Session Expired

How Political Parties in Power Influence Markets

No matter whether the White House and Congress are unified or divided, the stock market tends to march higher.

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.

When political questions are in the headlines, especially during election seasons or times of uncertainty, one may ask what impact the party in power has on the markets. But whether the White House and Congress are in sync or divided, and regardless of which party has majority control, markets tend to be resilient. History shows that the stock market (as represented by the S&P 500 Index)1 generally marches higher regardless of which party is in charge.

How markets react when the president and Congress represent the same political party

(D) Democrat, (R) Republican, 1937 - Present

S&P 500 Index (%)

Start

End

President

Senate

House

1 Yr

3 Yr

5 Yr

10 Yr

20 Yr

1937

1939

D - Franklin D. Roosevelt

D

D

-34.75

-5.27

-7.47

4.37

11.12

1939

1941

D - Franklin D. Roosevelt

D

D

-0.38

-7.37

3.71

7.18

13.38

1941

1943

D - Franklin D. Roosevelt

D

D

-11.59

10.11

16.81

13.25

14.66

1943

1945

D - Franklin D. Roosevelt

D

D

25.65

26.97

14.74

16.95

15.16

1945

1947

D - Harry S. Truman

D

D

36.34

9.82

10.60

17.00

14.88

1949

1951

D - Harry S. Truman

D

D

18.62

24.58

17.74

19.94

14.86

1951

1953

D - Harry S. Truman

D

D

23.99

13.21

23.76

16.08

12.06

1953

1955

R - Dwight D. Eisenhower

R

R

-0.94

25.63

13.51

13.40

11.64

1961

1963

D - John F. Kennedy

D

D

26.90

12.48

13.25

8.18

8.31

1963

1965

D - Lyndon B. Johnson

D

D

22.78

17.14

12.37

9.91

8.30

1965

1967

D - Lyndon B. Johnson

D

D

12.47

7.83

4.98

1.25

7.79

1967

1969

D - Lyndon B. Johnson

D

D

23.91

8.01

8.38

6.62

10.15

1977

1979

D - Jimmy Carter

D

D

-7.19

5.41

8.09

13.80

14.54

1979

1981

D - Jimmy Carter

D

D

18.46

14.27

17.30

16.27

17.73

1993

1995

D - Bill Clinton

D

D

10.09

15.35

20.27

9.35

8.22

2003

2005

R - George W. Bush

R

R

28.71

14.39

12.83

7.10

2005

2007

R - George W. Bush

R

R

4.92

8.63

0.42

7.68

2009

2011

D - Barack Obama

D

D

26.48

14.12

17.94

2017

2018

R - Donald Trump

R

R

21.85

Average

12.96

11.96

11.62

11.08

12.19

Summary

1 Yr

3 Yr

5 Yr

10 Yr

20 Yr

# Positive

14

16

17

17

15

# Negative

5

2

1

0

0

Total

19

18

18

17

15

% Positive

74%

89%

94%

100%

100%

% Negative

26%

11%

6%

0%

0%

How markets react when the president and Congress represent different political parties

(D) Democrat, (R) Republican, 1937 - Present

S&P 500 Index (%)

Start

End

President

Senate

House

1 Yr

3 Yr

5 Yr

10 Yr

20 Yr

1947

1949

D - Harry S. Truman

R

R

5.64

9.70

16.56

18.29

13.65

1955

1957

R - Dwight D. Eisenhower

D

D

31.43

7.70

14.90

12.79

6.86

1957

1959

R - Dwight D. Eisenhower

D

D

-10.72

12.69

12.77

9.19

7.90

1959

1961

R - Dwight D. Eisenhower

D

D

11.96

12.58

9.86

10.00

6.52

1969

1971

R - Richard Nixon

D

D

-8.41

2.82

1.99

3.16

9.52

1971

1973

R - Richard Nixon

D

D

14.23

5.06

3.22

8.45

11.14

1973

1975

R - Gerald Ford

D

D

-14.68

-4.82

-0.18

6.71

11.32

1975

1977

R - Gerald Ford

D

D

37.17

16.37

14.74

14.75

14.56

1987

1989

R - Ronald Reagan

D

D

5.18

17.32

15.35

15.28

11.80

1989

1991

R - George H.W. Bush

D

D

31.71

18.53

14.55

19.21

8.43

1991

1993

R - George H.W. Bush

D

D

30.49

15.62

16.59

17.45

9.14

1995

1997

D - Bill Clinton

R

R

37.61

31.15

28.56

12.07

9.85

1997

1999

D - Bill Clinton

R

R

33.39

27.58

10.70

8.42

7.68

1999

2001

D - Bill Clinton

R

R

21.06

-1.03

-0.57

-1.38

2007

2009

R - George W. Bush

D

D

5.50

-5.63

-0.25

6.94

2015

2017

D - Barack Obama

R

R

1.38

11.41

Average

14.56

11.07

10.59

10.76

9.87

Summary

1 Yr

3 Yr

5 Yr

10 Yr

20 Yr

# Positive

13

13

12

14

13

# Negative

3

3

3

1

0

Total

16

16

15

15

13

% Positive

81%

81%

80%

93%

100%

% Negative

19%

19%

20%

7%

0%

Source: Morningstar and Hartford Funds. Data starts on January 1 of the year following each November midterm election. US equity is represented by S&P 500 Index. Please see below for representative index definition.

Performance data quoted represents past performance and does not guarantee future results. The performance shown above is index performance and is not representative of any Hartford fund’s performance. Indices are unmanaged and not available for direct investment.

Talk to your financial advisor today to make sure your portfolio is positioned correctly regardless of what happens in Washington, D.C.

The material on this site is for informational and educational purposes only. The material should not be considered tax or legal advice and is not to be relied on as a forecast. The material is also not a recommendation or advice regarding any particular security, strategy or product. Hartford Funds does not represent that any products or strategies discussed are suitable for any particular investor so investors should seek their own professional advice before investing. Hartford Funds does not serve as a fiduciary. Content is current as of the publication date or date indicated, and may be superseded by subsequent market and economic conditions.

Investing involves risk, including the possible loss of principal. Investors should carefully consider a fund's investment objectives, risks, charges and expenses. This and other important information is contained in the mutual fund, ETF or closed-end interval fund prospectus or summary prospectus, which can be obtained from a financial professional and should be read carefully before investing.

Mutual funds and the closed-end interval fund are distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA/SIPC. Exchange-traded products are distributed by ALPS Distributors, Inc. (ALPS). Advisory services may be provided by Hartford Funds Management Company, LLC (HFMC) or its wholly owned subsidiary, Lattice Strategies LLC (Lattice). Certain funds are sub-advised by Wellington Management Company LLP and/or Schroder Investment Management North America Inc. Schroder Investment Management North America Ltd. serves as a secondary sub-adviser to certain funds. Hartford Funds refers to Hartford Funds Management Group, Inc. and its subsidiaries, including HFD, HFMC, and Lattice, which are not affiliated with any sub-adviser or ALPS. The funds and other products referred to on this Site may be offered and sold only to persons in the United States and its territories.